Otter offers carrot to new tech startups
Coeur d'Alene Press | UPDATED 13 years, 1 month AGO
BOISE (AP) - Gov. Butch Otter will unveil to legislators a state-backed investment fund for startups, part of a package meant to bolster the contribution of new technology and research to Idaho's economy.
One of Otter's central missions of the 2012 Legislature will be selling the program to conservative Idaho lawmakers who are leery of inserting taxpayer money into areas where they believe the private sector should take the reins.
The Idaho Global Entrepreneurial Mission, or iGem, as the proposal is called, includes a strategy of luring talented researchers to Idaho universities and the Center for Advanced Energy Studies in Idaho Falls. Once they arrive, they'll research energy, materials science and manufacturing, computer science and bio- and agricultural technology - areas where Idaho has a foundation - to develop products and spin off companies.
It's a program modeled after one in Utah that has received $73.5 million in state support since 2006, as well as $201 million in new higher-education facilities.
Otter spokesman Jon Hanian declined to describe the Idaho program's dimensions; the Republican governor is reserving details for his State of the State speech on Jan. 9.
According to a tentative plan obtained by The Associated Press, Otter will follow his announcement with a two-day promotional tour with presidents from the University of Idaho, Idaho State University and Boise State University.
House Majority Leader Mike Moyle said the Legislature is interested in doing anything it can to create jobs. But any proposal that will require Idaho to chip in taxpayer money must be accompanied by evidence it will work the way it's supposed to, he said.
"If they can show it's brought jobs and tax revenue to Utah, that will help bolster their case with the Legislature," said the Republican legislator. "But the devil is in the details. They'll have to make the case, because budgets will be tight this year."
Idaho is expecting a surplus for the first time in four years, but much of the money has been spoken for.
The Idaho Technology Council, an industry group that includes french fry giant J.R. Simplot, semiconductor maker Micron Technology Inc., and Blackfoot-based manufacturer Premier Technologies, has been working with Otter. Documents show the group will lobby legislators to support the package, including at a February reception.
Council President Jay Larsen said his group traveled to Utah to learn about its Science Technology and Research Initiative, or USTAR, founded in 2006.
Officials running USTAR say they've recruited 40 researchers so far, with the promise of competitive salaries and cutting-edge equipment not available in their current laboratories, and also benefits like downhill skiing at their doorstep. So far, Utah's $75 million investment has leveraged $137 million in grants for federal- or industry-sponsored research, said spokesman Michael O'Malley, who credited USTAR with producing 15 small companies.
Larsen hopes Idaho's program will replicate Utah's success in poaching all-star researchers, promoting collaboration among academia, private companies and government, and helping companies survive "the Valley of Death," where startups must weather severe financial losses before they reach profitability.
Larsen declined to pre-empt Otter on details, but said Idaho's investment would be "significant." Its funding is likely to require that state money be matched by private capital, he said.
Still under discussion is how the fund would be managed and whether it would include provisions to take ownership stakes in companies, Larsen said.
"Our access to capital is one of those areas that needs to have some significant improvement and focus," he said. "We would like to see a funding mechanism where there were matching funds...so the state would have an opportunity to make an investment."
Utah opted to put its money toward fields like brain research, computer science and energy studies. O'Malley said Idaho is also smart to focus on specific areas - energy, materials science, software and biotech - where it sees its own strengths.
"We have to make limited smart investments because we're a small state with a small budget," O'Malley said. "We can't compete dollar-for-dollar with Massachusetts or Maryland, the states that have life-science research budgets that dwarf ours."